[ARFC] Chaos Labs Risk Stewards - Increase Supply Caps V3 Ethereum

Governance
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Summary

A proposal to increase the supply and borrow cap for USDT and supply cap for wstETH on Aave V3 Ethereum.

Motivation

The supply cap for wstETH on Ethereum is currently at ~85% utilization, with the supply and borrow cap of USDT at 80% and 67%, respectively.
Following our supply and borrow cap methodology, and our LSD methodology, we recommend the following updates:

  • Increase the supply cap for wstETH from 450K to 600K.
  • Increase the supply cap for USDT from 200M to 300M, and the borrow cap from 185M to 250M. We want to highlight that upon execution of AIP-271, USDT will become a collateral asset on V3 Ethereum.

Specification

Chain Asset Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap
Ethereum wstETH 450,000 600,000 12,000 No Change
Ethereum USDT 200,000,000 300,000,000 185,000,000 250,000,000

Next Steps

Once we receive feedback from @Gauntlet on the above recommendations, we will be able to move forward to implement these updates via the Risk Steward process.

Disclaimer

Chaos Labs has not been compensated by any third party for publishing this ARFC.

Copyright

Copyright and related rights waived via CC0

1 Like
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We are aligned on the wstETH increase.

We do not recommend increasing USDT supply and borrow caps due to the impending execution of AIP-271, which may change USDT supply/borrow behavior.

3

We’ve prepared the payload to be executed via the Risk Steward process for this proposal.

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The wstETH cap increase has been executed via risk steward.

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